A Texas billionaire whose Houston-based financial group is under federal scrutiny is seeking to reassure his wealthy clients and employees that the oversight is routine and that a pair of “disgruntled” employees who questioned the company’s practices have sparked a firestorm.

“Regulatory agencies are increasing their oversight of all financial institutions and are responding appropriately after the deficiencies of the last decade,” R. Allen Stanford, chairman of Stanford Financial Group, told the sprawling firm’s clients this week in a letter obtained by the Houston Chronicle. “Regulatory officers have visited our offices and have stated that these are routine examinations.”

According to a person familiar with the matter, the firm is under investigation by the Securities and Exchange Commission, the FBI and the Internal Revenue Service. The entire scope of the probe is unclear, but investigators are looking into the sale of certificates of deposit issued by the firm’s Stanford International Bank in the Caribbean island nation of Antigua and Barbuda. The CDs have yielded returns higher than the average.

None of the agencies would confirm or deny the probes.

The firm, with offices in two buildings on Westheimer near the West Loop, is a privately held network of financial services companies led by Stanford, the chairman and chief executive. The company’s Web site described its private wealth management, institutional investment banking and emerging growth companies as its core businesses, but it also offers merchant and commercial banking, institutional sales and trading, real estate investment and insurance.

The company said it has more than $50 billion in assets under management or advisement. It has more than 50 offices in North America, Latin America, the Caribbean and Europe.

Six offices visited

Spokesman Brian Bertsch on Friday acknowledged that the SEC and the Financial Industry Regulatory Authority, called FINRA, a nongovernmental regulator for all securities firms doing business in the U.S., have visited six of Stanford Financial’s North American offices. He did not know if Houston was among them.

FINRA has enforcement authority over broker-dealers and brokers, and can impose penalties ranging from censure to expulsion from the industry.

“Both have stated to us that they are visiting some of our offices as part of a routine examination,” Bertsch said. “We are in contact with regulators all the time like every other financial institution.”

Also, the Florida Office of Financial Regulation has an “open examination” of the firm, which is a registered broker-dealer in Florida, spokeswoman Holly Hinson said Friday. She said such examinations are confidential beyond acknowledging that they are ongoing.

Suit byex-employees

In January 2008, two financial advisers who had resigned from Stanford Group Co., a member of Stanford Financial that offers private wealth management and institutional investment service, sued their former employer in Harris County. The case, currently in arbitration, alleges wrongdoing at the company.

In the lawsuit, D. Mark Tidwell and Charles Rawl allege they were forced to resign because they did not want to engage in unethical and illegal business practices.

The wrongdoing they allege took place at Stanford Group included misleading investors with false performance data, failure to file proper government forms for clients and purging files relating to the bank’s CD sales practices while under an SEC inquiry.

Mike O’Brien, lawyer for Tidwell and Rawl, said Friday that because Stanford countersued his clients claiming they “stirred up a hornet’s nest,” he did not want to comment or let them comment. Tidwell also personally declined comment.

Stanford Group contends in its suit Tidwell and Rawls are disgruntled ex-employees who were fired and owe the company for more than $500,000 in loans.

O’Brien confirmed earlier reports that his clients were subpoenaed by the SEC last summer asking about CD sales by the offshore bank and about a Stanford mutual fund program.

“There is a lot of smoke right now,” O’Brien said. “I think the flame will soon be evident.”

SEC under fire

In his letter to clients dated Wednesday, Stanford said that regulators are in overdrive to make up for previous inaction.

The SEC has been under fire for failing to investigate the secretive firm run by Bernard Madoff, who is alleged to have lost $50 billion of investors’ money after decades of robust returns.

“I want to be very clear, the bank remains a strong institution,” he said of Stanford International. According to its Web site, it had $8 billion in deposits last summer.

Stanford, 58, lives in St. Croix in the U.S. Virgin Islands and holds dual citizenship in the U.S. and Antigua and Barbuda. While he doesn’t spend much time in Houston and generally keeps a low profile, he and his company have supported various causes in cities where they operate. He was chosen World Finance magazine’s Man of the Year for 2008.

He also is No. 605 on Forbes’ list of the world’s billionaires, with net worth of $2 billion.

Stanford Financial traces its roots to 1932 and a company founded in Allen Stanford’s native Mexia by his grandfather, Lodis Stanford, according to the company’s Web site. Allen Stanford expanded the firm in Houston, starting with real estate in the early 1980s and growing into the global firm it is today.